1 April 2025

BaFin halves the residential real-estate systemic risk buffer

BaFin lowered the sectoral systemic risk buffer on residential mortgage exposures from 2% to 1%, which banks were required to hold from 1 May 2025, while keeping the countercyclical capital buffer at 0.75%. It framed the move as recognition that vulnerabilities in the German residential property market had eased.

Implications for capital — The reduction releases roughly €2–2.5bn of bank capital tied to residential mortgage lending, affecting the capital cost of real-estate credit.

Source: BaFin